Musicians' Union Demands More Money From Spotify

Britain's biggest musicians' union has entered the growing row
over Spotify, demanding that the music streaming service draw up
a new minimum pay deal for artists.

The Musicians' Union, which has more than 30,000 members
throughout the industry, said it was pushing for a collective pay
agreement modelled on the royalties paid by BBC and commercial
radio stations. Spotify pays artists as little as 0.4p per
stream, which means that a song that had a million plays would
earn its performer just £4,000.

By contrast a three-minute song played on Radio 2 generates £59.73 for the songwriters and another
similar sum to be split between the label and the performing
artists. This 50/50 split is being advocated by the union,
although the remuneration itself would be significantly more
modest.

The latest row over Spotify's royalty payments began last week
after Radiohead's frontman, Thom Yorke, and the band's producer,
Nigel Godrich, pulled songs from the streaming service, the
latter complaining that "new artists get paid fuck all with this model".

Stephen Street, who produced Blur's Parklife album,
offered a swift riposte, accusing Yorke of hypocrisy, pointing
out that Radiohead devalued digital music by allowing fans to
download their In Rainbows album free in 2007.

John Smith, general secretary of the Musicians' Union, said the
consensus among its thousands of members was that royalty
payments made by Spotify, which offers unlimited access to 20m
songs to subscribers who pay monthly fees starting at £5, were
"unfair".

He said: "The argument that has kicked off this week is
absolutely right and it really is hard, particularly for emerging
artists, to make a decent amount of money.

"The streaming model should be able to work to the benefit of
performers. We'd like to see a realignment of the intellectual
property rights that govern all this in order to be fairer to
artists. In the world of BBC radio and commercial radio, licensed
by PPL [Phonographic
Performance Limited] or PRS [the UK's music royalty
collection society] for composers, there is a division of that
licence – 50/50 – between record companies and performers that
includes everyone from the famous artists right down to the
triangle player, and we'd like to see something similar for this
kind of thing."

One artist, singer-songwriter Tom McRae, said the argument that Spotify would
prove to be the salvation of the music industry – because it
negates the threat from piracy and generates income – had failed.
He said Spotify had "pulled the wool over fans' eyes, letting
them believe they're supporting the artists by using a legal
streaming service which pays out royalties to the bands.

"Friends and family tell me with pride how they listen to my
earlier albums on Spotify, in the knowledge that every time they
listen I'm earning money. I haven't got the heart to tell them
that if they listened every hour of every day for the rest of
their lives it wouldn't add up to the price of a round of
drinks."

McRae chose not to make his last album available on Spotify. He
also removed other albums to which he owns the rights in order to
preserve the sales of downloads and CDs. He said: "If the main
source of income for recorded music becomes streaming royalties,
everyone except the record companies is screwed. No surprise to
learn, then, that the majority of financial backing for Spotify
comes from the major labels."

Spotify states that by the end of this year it will have paid out
around $1bn (£660m) to rights holders. "We're 100% committed to
making Spotify the most artist-friendly music service possible,
and are constantly talking to artists and managers about how
Spotify can help build their careers," it said. It added that its
goal was to "provide the financial support to the music industry
necessary to invest in new talent and music".

A spokesman said: "We've already paid $500m to rights holders,
and by the end of 2013 this will have reached $1bn. Much of this
money is being invested in nurturing new talent and producing
new, great music."